- The Washington Times - Tuesday, August 10, 2010

ANALYSIS/OPINION:

The Sarbanes-Oxley legislation of 2002 was a knee-jerk reaction to the Enron scandal. The bill called for most regulations to be written by the Securities and Exchange Commission or the Government Accountability Office; little detail was included. The resulting regulations were in many respects poorly written, with little thought given to the fallout. Unintended consequences resulted, the most expensive having to do with internal controls and the significant cost to large public companies that had to adopt the poorly thought-out regulations in an area where there is no firm standard. Billions and billions of dollars later, after numerous changes to this regulation, I am not sure anything positive was achieved, certainly not anything meaningful enough to be considered in any way cost-effective.

Now we have a financial reform bill that, although it contains more than 2,000 pages, has directives requiring that more than 350 specific regulations are “to be written.” This could make the Sarbanes-Oxley folly seem like small change in terms of quality controls and cost of implementation. Given this unknown, I also fail to see how the current administration and the Democrats can claim all the wonderful things this legislation will do for the “people.” Of course, they also say health care reform will provide care to 30 million more people without increasing the deficit. Apparently, insulting the intelligence of the American people is a never-ending political game.

JOHN A. YERRICK

Bethesda, Md.

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